Illinois Automobile Dealers Association Challenges Direct EV Sales in Chicago Court Appeal

The Illinois Automobile Dealers Association (IADA) has filed an appeal in Chicago, appealing a December court order that allows EV companies Rivian Automotive and Lucid Group to continue selling straight in the state. Associate Judge David Atkins ruled on December 19th that the Illinois Secretary of State was within its rights to give dealer licences to the EV startups, as it had done for Tesla Inc. This decision allows other EV manufacturers to follow Tesla’s direct sales approach.

The IADA, which represents 700 dealerships in the state, claims that this verdict gives EV producers preferential treatment and establishes a monopoly with no value advantage. According to the Illinois Vehicle Code and the Illinois Motor Vehicle Franchise Act, public vehicle sales shall be conducted through licenced and independent franchised dealers.

However, according to Judge Atkins, the prevalent practice of using franchised dealers for new automobile sales is not required by state law. The IADA has filed an appeal based on these restrictions, with Executive Director Joe McMahon declaring, “You cannot be a manufacturer and a dealer. That’s in the law so we think it’s pretty clear.”

The decision of this appeal will have substantial ramifications for the Illinois EV business and may set a precedent for other states with comparable regulations. As the EV industry expands, manufacturers may push for more direct sales methods, putting the existing franchise dealership model under pressure.